UNCERTAIN DEALS

The European Union’s latest deal with Greece, the third bailout of the country in the last five years, may yet fail.

The Greek government may not be able to get the agreement through parliament as it is only going to make austerity harder for the Greek people.

Four bills need to be passed in the next twenty-four hours. Pensions must be cut; taxes increased; the defense budget slashed and steps taken toward privatizing ports and other government owned enterprises, which it is hoped will cut corruption and make things more efficient. As the ruling party, Syriza, is very left-wing, there’s a good possibility the parliament will not approve everything. The Greek population voted against further austerity less than a month ago.

There is concern, too, beyond Greece’s borders. European creditor countries are fully aware that, even if the Greek parliament approves the agreement, they may not keep their word. It’s happened before. This would mean that, in a few months, Greece will be back, asking for a further bailout.

A further set-back occurred this morning when the International Monetary Fund (IMF) announced that Greece’s debt was “unsustainable” and that the country needs a much greater infusion of cash from the EU. The EU bailout deal has, at least, united all concerned in the conviction that it won’t work! The Greek problem is not about to go away.

Then there’s the deal between six western powers and Iran.

The British Guardian Weekly wasn’t sure which deal to put on its front page, Greece or Iran. Right up to the last minute, Greece was going to be the leader, but then the deal with Iran came through. The paper decided that the Iranian deal was the more important one, with far reaching implications. But both deals could have both short-term and long-term negative consequences.

On Iran, the headline on the Fox News website was: “Win for Putin?” Putin has been supportive of Iran, Syria’s Assad and Shi’ites in general.

It’s certainly a win for Iran, which can look forward to the lifting of international sanctions.

The best the West can hope for is that this will buy time, that Iran will not develop nuclear weapons for at least the next ten years, by which time, democracies being as they are, none of those signing the agreement today, will still be in power. They can, as with so many things, kick the can down the road.

However, even if this presupposes Iran will keep its side of the deal. That’s no more likely than Greece abiding by the terms of the EU bailout deal.

Anyway, it doesn’t really matter what the West thinks about the Iranian deal.

Israel’s prime minister has described the deal as “a mistake of historic proportions,” that it endangers his country. He added: “the more you read it, the worse it gets.” Iran has been screaming “Death to Israel. Death to America,” for over 35 years. A recent demonstration in Tehran showed mobs screaming the same again. Perhaps nobody in Washington has been watching!

But, even Israel is not the country most concerned about the agreement. The Sunni Arab states are. Almost certainly, they will see through this agreement and their fears of Shia Iran acquiring nuclear weapons will lead them to acquire the same. It may take a few years, but they will be driven by a great sense of urgency. Saudi Arabia, Turkey and Egypt are the three countries most likely to pursue their own bomb, with immediate help from Pakistan, which already has the bomb. Saudi Arabia certainly has the money for this.

The greatest threat to world peace remains the Sunni-Shia conflict, a struggle that has continued for over thirteen centuries. Although an Obama Administration spokesman expressed the hope that the Iran deal would help bring a resolution to the ancient conflict, this is at best naïve. Nothing will end the conflict until the Messiah comes and sorts out the religious mess that is today’s world. Meanwhile, the US will be seen as siding with the Shi’ites against the Sunnis. Tehran and Damascus must be celebrating at this development.

The Iranian deal brings to mind I Thessalonians 5:3 : “For when they shall say, Peace and safety; then sudden destruction comes upon them, as travail Upon a woman with child; and they shall not escape” (KJV).

Thankfully, Jesus Christ is returning to end the spiritual confusion. “And unless those days were shortened, no flesh would be saved; but for the elect’s sake those days will be shortened.” (Matthew 24:22).

Post navigation

One thought on “UNCERTAIN DEALS”

I read a financial article the other day which showed that no amount of austerity can solve the Greece financial situation and his reasoning was from an angle I hadn’t considered yet his analysis was flawless. He contended that the very structure of the EU is the basis for the Greece crisis. They operate as a sovereign state yet are using the Euro as it’s currency, now if all money were backed by a fixed gold exchange rate this wouldn’t be a problem but they aren’t. Today’s money is fiat which means the only limits to its creation is the Central Bank’s willingness to print it. Back to my point. No nation runs a perfectly balanced trade acct, they either run a surplus or a deficit, if you run a deficit then at the end of the year you have less money in circulation than at the beginning and if you can’t print more of the monetary unit your nation is using then sooner or later you WILL run out of money. This is precisely what is happening in Greece. For years the nations who have been running trade surpluses like Germany have been forced to keep loaning money to countries that have been running trade deficits. It’s like a giant poker game in which Germany keeps winning every hand, at some point the other players are going to run out of chips and unless given more chips will have to leave the game. It’s really that simple and is the very reason policy makers are blaming everything BUT the root cause for the problem, if it were ever common knowledge that the EU was fatally flawed then confidence in the Euro would collapse. This is precisely why the final Union is symbolized as iron mixed with clay……it can’t work but for a short time because the foundation is built on sand.